Risk Management Overview
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Questions and Answers

Match the following definitions with their corresponding terms:

Risk reassessment = Periodic review of risks to identify new risks and evaluate responses Risk management = Process of identifying and mitigating risks Risk register = Document that lists identified risks and their status Risk appetite = Amount of risk an organization is willing to accept

Match the risk management concepts to their descriptions:

Inherent risk = Risk existing in the absence of controls Residual risk = Risk that remains after controls are applied Risk transfer = Shifting the burden of risk to another party Risk matrix = Tool used to assess probability and impact of risks

Match the following risk strategies with their definitions:

Risk avoidance = Eliminating risk entirely Risk acceptance = Acknowledging risks without taking action Risk sharing = Distributing risk across multiple parties Risk reduction = Implementing measures to minimize impact of risks

Match the following assessment types to their characteristics:

<p>Qualitative risk assessment = Uses subjective judgment to assess risks Quantitative risk assessment = Utilizes numerical data to evaluate risk Risk assessment = Process of identifying and analyzing potential risks Risk strategy = Plan for addressing identified risks</p> Signup and view all the answers

Match the following incorrect statements about risk management to their correct concepts:

<p>Ignoring risks = Approaching risks without acknowledging them Eliminating all risks = Unrealistic goal in risk management Focusing only on financial risks = Limiting the scope of risk management Denial of risks = Refusal to acknowledge existing risks</p> Signup and view all the answers

Match the risk management concepts with their correct definitions:

<p>Risk Tolerance = The level of risk an organisation is unwilling to take. Risk Mitigation = Eliminating all risks. Risk Avoidance = Involves accepting the risk. Risk Workshop = To eliminate all risks.</p> Signup and view all the answers

Match the following terms with their appropriate descriptions:

<p>Bowtie method = Visual representation of risk factors and controls Risk owner = Individual responsible for managing a specific risk Risk management plan = Document outlining risk management strategies Risk matrix = Structured tool to evaluate risk significance</p> Signup and view all the answers

Match the terms to their descriptions in risk management:

<p>Risk Event = An occurrence that has no effect on project objectives. Risk Indicator = A measure that eliminates risks. Risk Communication = Sharing information only about financial risks. Risk Escalation = The process of eliminating risks.</p> Signup and view all the answers

Match the following incorrect definitions with their corresponding terms:

<p>Risk owner = Someone who creates risks Risk register = Document that lists only financial risks Risk transfer = Transferring risk to an internal department Risk appetite = Desire to avoid all risks</p> Signup and view all the answers

Match the following tactics to their definitions:

<p>Ignorance = Avoiding knowledge of existing risks Denial = Refusing to accept the existence of risks Acceptance = Recognizing and acknowledging risks Reduction = Taking action to decrease risk exposure</p> Signup and view all the answers

Match the following concepts with their related processes:

<p>Contingency Plan = A plan to eliminate all risks. Risk Response Planning = Planning to create risks. Risk Aggregation = Combining risks to ignore them. Internal Audit = To ignore risks.</p> Signup and view all the answers

Match the descriptions to the correct terms in risk management:

<p>Risk Culture = The values and beliefs about ignoring risks. Risk Identification = To create risks. Risk Reduction = Involves eliminating the risk. Risk Impact = The effect of risk exposure.</p> Signup and view all the answers

Match the following risk management activities with their objectives:

<p>Risk Mitigation = To ignore risks. Risk Avoidance = Involves reducing the risk. Risk Workshop = To create risks. Risk Communication = The process of eliminating risks.</p> Signup and view all the answers

Match the following terms with their meanings:

<p>Contingency Plan = A plan to create risks. Risk Escalation = The process of creating risks. Risk Indicator = A tool that ignores risk exposure. Risk Tolerance = The desire to avoid all risks.</p> Signup and view all the answers

Match the ISO standards with their years:

<p>ISO 35100 = 2008 ISO 39100 = 2012 ISO 51100 = 2009 ISO 60100 = 2011</p> Signup and view all the answers

Match the risk definitions with their correct terms:

<p>Risk Mitigation = Creating new risks. Risk Culture = The understanding of eliminating all risks. Risk Event = An event that is always ignored. Risk Communication = The process of ignoring risk information.</p> Signup and view all the answers

Match the risk management terms with their definitions:

<p>Risk tolerance level = Degree of variability in outcomes that an organisation is willing to withstand. Risk avoidance strategy = Changing the project plan to eliminate the risk. Risk acceptance = No action is taken to address a risk because its impact is deemed acceptable. Risk sharing = Distributing the risk among multiple parties, such as through partnerships.</p> Signup and view all the answers

Match the risk concepts with their descriptions:

<p>Risk appetite statement = Formal declaration of the amount and type of risk an organisation is willing to pursue. Risk monitoring and control = Tracking identified risks and evaluating the effectiveness of the risk process. Risk exploitation = Strategy to ensure that opportunities are realised by taking proactive steps. Risk prioritisation = Ranking risks based on their probability and impact to determine which to address first.</p> Signup and view all the answers

Match the risk terms with their functions:

<p>Risk diversification = Spreading risk across different areas to reduce impact. Risk threshold = Level of risk exposure above which risks are addressed. Risk impact/consequence = Effect of a risk event on project or organisational objectives. Risk communication plan = Outlines how risk information will be communicated to stakeholders.</p> Signup and view all the answers

Match the ISO standard with its year:

<p>ISO 31000 = 2009 AS/NZS 31000 = 2009 ISO 9001 = 2015 ISO 14001 = 2015</p> Signup and view all the answers

Match the risk strategies with their explanations:

<p>Risk sharing = Involves distributing the risk among multiple parties. Risk acceptance = Involves acknowledging a risk without taking action. Risk avoidance = Involves changing plans to eliminate a risk. Risk exploitation = Involves proactively pursuing opportunities.</p> Signup and view all the answers

Match the risk management activities with their purposes:

<p>Risk monitoring = Tracking identified risks. Risk evaluation = Assessing the impact and effectiveness of the risk process. Risk identification = Recognizing new risks. Risk control = Implementing strategies to manage risks.</p> Signup and view all the answers

Match the risk terms with their corresponding actions:

<p>Risk appetite statement = Documents the level of risk an organization is willing to accept. Risk diversification = Mitigates potential loss by spreading risk. Risk threshold = Sets a boundary for acceptable risk exposure. Risk impact/consequence = Assesses the potential effect of identified risks.</p> Signup and view all the answers

Match the risk definitions with their significance:

<p>Risk acceptance = A strategy to take no action on certain risks. Risk appetite statement = Indicates the level of risk that is acceptable. Risk tolerance level = Defines variation in acceptable outcomes. Risk communication plan = Ensures stakeholders are informed about risks.</p> Signup and view all the answers

Match the risk concepts with their definitions:

<p>Risk threshold = The level of risk exposure that is always acceptable. Risk appetite statement = A declaration of the risks an organisation will not take. Risk tolerance level = The degree of risk that is always unacceptable. Risk acceptance = Accepting risks to eliminate them.</p> Signup and view all the answers

Match the risk management strategies with their descriptions:

<p>Risk avoidance strategy = Avoiding risks to eliminate them. Risk sharing = Sharing risks to create new ones. Risk monitoring and control = Tracking risks to ignore them. Risk exploitation = Exploiting risks to create new ones.</p> Signup and view all the answers

Match the risk management actions with their objectives:

<p>Risk prioritisation = Ranking risks to eliminate them. Risk reassessment = Reassessing risks to eliminate them. Risk diversification = Eliminating risk by spreading it. Risk communication plan = A plan to communicate only financial risks.</p> Signup and view all the answers

Match the following terms with their meanings:

<p>Risk monitoring = Monitoring risks to create new ones. Risk consequence = The impact of a risk that is always negative. Risk exploitation = Exploiting risks to ignore them. Risk sharing = Sharing risks to eliminate them.</p> Signup and view all the answers

Match the risk concepts with their focus area:

<p>Risk mitigation = The process of identifying and reducing risks. Risk transference = Shifting the impact of risk to another party. Risk assessment = Evaluating risks and their potential impacts. Risk acceptance = Recognizing and allowing for certain risks.</p> Signup and view all the answers

Match the following risk management strategies with their utility:

<p>Risk retention = Retaining risks to manage cost. Risk reduction = Implementing measures to lower risk impact. Risk avoidance = Choosing not to engage in activities that carry risk. Risk sharing = Distributing risk among multiple parties.</p> Signup and view all the answers

Match the concepts of risks with their categories:

<p>Operational risk = Risks arising from day-to-day operations. Financial risk = Risks related to financial loss. Strategic risk = Risks from changes in the market environment. Compliance risk = Risks of failing to comply with laws and regulations.</p> Signup and view all the answers

Match the types of risks with their characteristics:

<p>Inherent risk = The level of risk before controls are applied. Residual risk = The level of risk remaining after controls. Contingent risk = Risk dependent on specific events. Systemic risk = Risk affecting the entire system or market.</p> Signup and view all the answers

Match the following concepts in risk management with their definitions:

<p>Risk Assessment = The process of identifying potential hazards and analysing what could happen if a hazard occurs. Risk Register = A tool used to document risks, their severity, and action steps to manage them. Risk Appetite = The amount and type of risk an organisation is willing to take to meet its objectives. Risk Matrix = A tool to define risk levels by considering probability and impact.</p> Signup and view all the answers

Match the following risk management terms with their explanations:

<p>Inherent Risk = Risk before controls are applied. Residual Risk = Risk that remains after controls have been implemented. Risk Transfer = Shifting the risk to a third party, such as through insurance. Risk Owner = An individual responsible for managing a specific risk.</p> Signup and view all the answers

Match the different types of risk assessment with their characteristics:

<p>Qualitative Risk Assessment = Uses subjective judgement. Quantitative Risk Assessment = Uses numerical data. Risk Mitigation = Taking steps to reduce the adverse effects of potential risks. Risk Culture = The values, beliefs, and understanding about risk shared within an organisation.</p> Signup and view all the answers

Match the following risk management tools and practices with their purposes:

<p>Risk Management Plan = To outline how risk management will be performed on a project. Risk Workshop = A session where stakeholders identify and assess risks and develop strategies. Risk Indicator = A metric used to measure risk exposure or control effectiveness. Risk Communication = Sharing information about risk between decision-makers and stakeholders.</p> Signup and view all the answers

Match the following risk management concepts with their distinctions:

<p>Risk Avoidance = Eliminates the risk. Risk Reduction = Lowers the likelihood or impact of the risk. Internal Audit = Provides independent assurance on risk management processes. Bowtie Method = Visualises pathways from causes to consequences of a risk event.</p> Signup and view all the answers

Match these specific terms in risk management with their definitions:

<p>Risk Tolerance = The specific maximum risk an organisation is willing to take. Risk Severity = The impact level of a risk event. Risk Status = Current assessment and management of identified risks. Risk Strategy = Long-term approach to managing risks.</p> Signup and view all the answers

Match the risk management processes with their respective actions:

<p>Risk Identification = The first step in the risk management process. Risk Analysis = Assessment of identified risks to understand their implications. Risk Control = Implementing measures to mitigate risks. Risk Review = Periodic evaluation of risk management effectiveness.</p> Signup and view all the answers

Match the purpose of the following risk management elements:

<p>Risk Assessment = Identify potential hazards and analyze impacts. Risk Communication = Facilitate information exchange among stakeholders. Risk Reporting = Document and inform about risk status. Risk Monitoring = Continuously evaluate risk management effectiveness.</p> Signup and view all the answers

Match the following risk management terms with their definitions:

<p>Risk identification = To determine which risks might affect the project and document their characteristics. Risk acceptance = A strategy where no action is taken because the risk's impact is deemed acceptable. Risk escalation = Transferring a risk to a higher authority when it cannot be managed at the current level. Risk appetite statement = A formal declaration of the amount and type of risk an organisation is willing to pursue or retain.</p> Signup and view all the answers

Match the following concepts with their descriptions:

<p>Risk event = An occurrence that has a negative or positive effect on project objectives. Contingency plan = A predefined action plan implemented if a specific risk event occurs. Risk probability = The likelihood that a risk event will occur. Risk impact = The effect or consequence of a risk event on project objectives.</p> Signup and view all the answers

Match the following risk strategies with their meanings:

<p>Risk avoidance strategy = Changing the project plan to eliminate the risk or protect objectives from its impact. Risk exploitation = Ensuring opportunities are realised by taking proactive steps. Risk sharing = Distributing the risk among multiple parties, such as through partnerships or insurance. Risk diversification = Spreading risk across different areas to reduce the impact of any single risk.</p> Signup and view all the answers

Match the following risk management practices with their purposes:

<p>Risk prioritisation = Ranking risks based on their probability and impact to determine which to address first. Risk monitoring and control = Tracking identified risks, monitoring residual risks, and evaluating risk process effectiveness. Risk communication plan = Outlines how risk information will be communicated to stakeholders. Risk threshold = The level of risk exposure above which risks are addressed.</p> Signup and view all the answers

Match the following terms related to risk evaluation to their definitions:

<p>Risk aggregation = Combining multiple risks to understand their collective impact. Risk tolerance level = The degree of variability in outcomes that an organisation is willing to withstand. Risk monitoring = The process of tracking identified risks and their impacts. Risk response planning = Developing options and actions to enhance opportunities and reduce threats.</p> Signup and view all the answers

Match the following risk management terms with the corresponding descriptions:

<p>Risk communication = The process of sharing risk-related information with stakeholders. Residual risk = The risk that remains after risk response efforts have been taken. Threat = A potential negative occurrence that may affect project objectives. Opportunity = A potential positive occurrence that may enhance project objectives.</p> Signup and view all the answers

Match the following terms with their related actions:

<p>Risk identification = Documenting the characteristics of potential risks. Risk analysis = Evaluating the likelihood and impact of identified risks. Risk reporting = Communicating risk findings to project stakeholders. Risk evaluation = Assessing the significance of risks for prioritization.</p> Signup and view all the answers

Match the following risk management concepts with their key components:

<p>Stakeholder engagement = Involving stakeholders in the risk management process. Risk review = Regularly revisiting and updating the risk management plan. Impact assessment = Determining the effects of risks on project objectives. Risk strategy selection = Choosing the appropriate response strategies for identified risks.</p> Signup and view all the answers

Study Notes

Risk Management

  • Risk management is the process of identifying, assessing, and controlling threats to an organization, considering its service provision, financial, legislative, and regulatory responsibilities.
  • Main risk management strategies are avoidance, reduction, transference/sharing, and acceptance/retention.
  • Risk assessment is the process of identifying potential hazards and analyzing potential outcomes if a hazard occurs.
  • Qualitative risk assessment uses subjective judgment based on non-numerical data, while quantitative risk assessment utilizes numerical data and statistical methods.
  • A risk register is a tool for documenting risks, their severity, and actions to manage them.
  • Risk appetite is the acceptable level and type of risk an organization is willing to take to achieve its strategic objectives.
  • A risk management plan outlines how risk management will be performed on a project, including methodologies, tools, and techniques.
  • Inherent risk is the risk level before any management actions are taken, while residual risk is the remaining risk level after management actions are implemented.
  • A risk matrix prioritizes risks by considering probability/likelihood and consequence/severity.
  • Risk transfer involves shifting risk to a third party, such as through insurance or outsourcing.
  • A risk owner is responsible for managing a specific risk and ensuring mitigation measures are implemented.
  • The Bowtie method visually displays risk pathways from causes to consequences.
  • Internal audit ensures an organization's risk management, governance, and internal control processes are effective.
  • Risk tolerance is the maximum risk an organization is willing to take related to a specific risk.
  • Risk mitigation involves reducing adverse effects of potential risks.
  • A risk indicator is a metric used to measure risk exposure or control effectiveness.
  • Risk avoidance involves eliminating the risk entirely, while risk reduction involves minimizing the likelihood or impact of a risk.
  • Risk communication shares information about risks between decision-makers and stakeholders.
  • A risk workshop is a collaborative session to identify and assess risks, and develop strategies to manage them.
  • Risk culture refers to shared values, beliefs, knowledge, and understanding of risk within an organization.
  • Risk identification aims to determine which risks might affect a project/activity.
  • Risk event is an occurrence with a negative or positive effect on organizational objectives.
  • Risk response planning enhances opportunities and reduces threats to project/activity/organizational objectives.
  • A contingency plan is a predefined action plan if a specific risk event occurs.
  • Risk escalation involves transferring a risk to a higher authority when it cannot be managed at the current level.
  • Risk aggregation combines multiple risks to understand their collective impact.
  • Risk impact is the effect or consequence of a risk event on organizational objectives.
  • Risk threshold is the level of risk exposure above which risks are addressed.
  • Risk monitoring and control tracks and evaluates risk process effectiveness.
  • Risk appetite statement declares a company's willingness to take and retain risk.
  • Risk diversification spreads risks across different areas.
  • Risk prioritisation ranks risks based on probability and impact.

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Description

This quiz covers the fundamental concepts of risk management, including strategies for risk assessment, the risk management process, and key tools such as the risk register and risk management plan. Learn about qualitative and quantitative methods and how organizations determine their risk appetite to align with strategic objectives.

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